Audit Partner Rotation, Earnings Quality and Earnings Conservatism

@inproceedings{Hamilton2005AuditPR,
  title={Audit Partner Rotation, Earnings Quality and Earnings Conservatism},
  author={Jane Meier Hamilton and Caitlin M. S. Ruddock and Donald Stokes and Stephen L. Taylor},
  year={2005}
}
We provide evidence of an association between audit partner rotation and the quality of earnings. It is a requirement for Australian firms that the engagement partner be identified by name in the annual report. Using a sample of 3,621 firm-years between 1998 and 2003, we show that audit partner changes most likely reflecting partner rotation (i.e., they are not due to a switch of audit firm) are associated with lower signed unexpected accruals, and that for Big 5 clients this relation is driven… CONTINUE READING

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